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1、Corporate solvency analysisAbstract With the global economic integration and the development of a modern credit economy, debt management has become an important means of financing a modern enterprise and strategy. The rational use of leverage, financial leverage to bring benefits to the enterprise,
2、effectively improve the return on equity, but at the same time, the debt will also give enterprises the potential financial risk, or even the risk of bankruptcy. In the investment before the solvency of the business analysis, enterprise predict risk and protect business interests in an effective way
3、. Key words short-term liquidity factors affecting long-term solvency capital structure 1, short-term solvency analysis 1. Short-term liquidity is mainly manifested in corporate debt maturity the relationship between the disposable liquid assets, the main measure of a current ratio, quick ratio. (1)
4、 The current ratio is the ratio of current assets to current liabilities. The current ratio reflects the companys liquid assets available to pay current liabilities of the extent of the greater liquidity ratio, indicating the stronger the short-term solvency. If a company current ratio increased yea
5、r by year, then the short-term solvency tends to improve and enhance the contrary, then the short-term solvency tends to reduce business risk has increased. (2) The quick ratio is the liquid assets to current liabilities ratio. The higher the ratio, indicating the stronger the solvency of enterprise
6、s. Generally considered that the ratio of the value of a more reasonable. 2. The existing solvency analysis, current ratio, quick ratio are all built on the liquidation basis rather than on the basis of continuing operations. However, enterprises must survive all the current assets can not be realiz
7、ed to repay current liabilities, it is not possible to realize all its assets to repay corporate debt. (1) Cash generated from operating activities in the capacity of Enterprises in the business activities of the ability to generate cash depends on the size and growth in corporate sales, costs, and
8、the proportion of expenditure on changes in credit policy, asset management efficiency, the external environments in change and adaptability of enterprises and other factors. Analysis in this area can be carried out from the following two aspects: analyze cash flow in recent years to observe the bus
9、iness activities of enterprises in recent years, the cash flow generated is sufficient. Analyzes operating activities generated cash flow statement cash flow. First, cash flow from operations to analyze the basic income and cash outflow. Second, the analysis of working capital investment is appropri
10、ate. Finally, we can also be analyzed by calculating the ratio of cash flow and debt repayment of the relationship: cash flow from operating activities / current maturity of debt. By analyzing the cash flow business cash flow period to determine the speed. In fact the number of days of cash flow is
11、equal to the number of days inventory turnover increases the number of days accounts receivable minus accounts payable turnover occupied by the number of days. In general, the fewer the number of days cash flow, its turnover, the faster, companies greater ability to generate cash, the enterprises so
12、lvency will be. (2) short-term financing capacity of enterprises Refinance old debt by the majority of companies have adopted techniques of a debt, it also includes the ability to repay short-term debt capacity in this area. However, enterprises often can not short-term financing capacity of the pro
13、ject directly from the point of view out of the financial statements, notes to financial statements need to be analyzed: business a good business credit; enterprises can use a bank line of credit; good long-term corporate financing environment; Some long-term assets of enterprises an immediate liqui
14、dity; sale of the business accounts receivable or discounted notes receivable; corporate liabilities, or credit guarantees provided by others. (3) the quality of current assets Liquidity to conduct business activities of enterprise short-term resources to prepare for the vast majority of current ass
15、ets in the future business activities should be translated into cash flow into the next round. The balance sheet, current assets mainly reflects the quality of the book value and market value compared to the existence of overvalued issues. 2, long-term solvency analysis Long-term debt refers to debt for a period exceeding one year, long-term debt due within one year included in the balance sheet short-term liabilities. 1. The long-term solvency analysis is to determine the
